1. This application, in revision, is by the Union of India, as owner of the Northern Railway Administration, which was opposite party to the application, made by the opposite party in this Court, under Section 8 of the Arbitration Act, 1940 (X of 1940), hereinafter referred to as “the Act”, which has been allowed by the Court below and a pleader has been appointed as arbitrator in the case. The relevant history of the case, leading up to the present application, may briefly be stated thus:

Samples of Mankatha sand were called for by the petitioner from the opposite party, who is a contractor, and, finally, Sample No. 3 was approved. According to the terms of the contract between the parties, which is Ex. A, certain quantity of the said sand was to be supplied by the 2nd of July, 1956, which was the stipulated time for the supply. Admittedly, the Opposite party sup-lied sand, as contracted for, but, two wagons, out of three wagons, of sand, which were sent out of time, after the stipulated date — the 2nd of July, 1956,—were not accepted, on the ground that those two wagons did not contain Sand of the specification contracted for.

2. In the contract (Ex. A) there was an Arbitration Clause to the following effect:

“In the event of any dispute or difference of opinion between the Railway Administration and the contractor as to the respective rights and obligations of the parties hereunder, or as to the true intent and meaning of these presents or any articles or conditions thereof such dispute or difference of opinion (except the matter regarding which the decision has been specially provided for in this agreement) shall be referred to the sole arbitrator of an officer who shall be nominated for the purpose by the General Manager, N. Railway for the time being, and his decision shall be final, conclusive and binding on the parties. For the purpose of this agreement, the General Manager will mean the head of the Railway Administration.”

3. The opposite party, therefore, served a notice (Ex. 1(b)) under S. 8 of the Act on 25-8-1958 on the General Manager of the Northern Railway of the petitioner, to appoint an arbitrator, as stipulated in the above quoted Arbitration Clause of the contract, Ex. A, The General Manager, however, in spite of admittedly receiving this notice did not reply nor did he take any step for appointing an arbitrator. The opposite party, thereafter, filed an application under S. 8 of the Act on 29-4-59 for appointment of an arbitrator by the Court and to refer the matter in dispute for his arbitration and submission of his award on it.

4. This application of the opposite party was contested by the petitioner on the ground, inter alia, that the application under S. 8 of the Act was not maintainable because it had no application to the facts of the present case.

5. The Court below overruled the objection of the petitioner and held that the application made by the opposite party under S. 8 of the Act was maintainable, and, that as admittedly differences had arisen between the parties regarding the contents of the two wagons of sand which were ??? returned by the petitioner to the opposite party, the latter was entitled to get an arbitrator appointed under S. 8 of the Act, and accordingly, appointed Sri Ram Bahadur Sinha, Pleader, as arbitrator in the case to make an award on the basis of the contract between the parties.

6. The petitioner, therefore, has moved this Court against the aforesaid order.

7. It was argued by Mr. P.K Bose, in sop-port of the rule, that S. 8(1)(a), under which alone the application of the opposite party could possibly come, if at all, does not apply here, because the General Manager, as contemplated by the Arbitration Clause in Ex. A, has not yet refused to appoint an Arbitrator. He further contended that, in any view of the matter, in a case like the present, where knowledge of engineering was essential, a pleader should not have been appointed as an arbitrator but a qualified engineer), nominated by the General Manager, should have been appointed, and, if the General Manager on being asked by the Court, would have refused to nominate an officer of the Railway Department as an arbitrator, only then the Court could nominate another arbitrator possessing engineering qualifications.

8. Mr. Parsuram Prasad Varma, appearing for the opposite party, in reply, supported the order under revision in toto.

9. The first question, therefore, which requires determination, is, whether, here, S. 8(1)(a) of the Act applies.

10. In order to decide this question, however, it is necessary to read the material portion of Section 8 of the Act. Section 8(1)(a) and (2). are in these terms:

“8. Power of Court to appoint arbitrator or umpire.

(1) In any of the following cases;

(a) where an arbitration agreement provides that the reference shall be to one or more arbitrators to be appointed by consent of the parties, and all the parties do not after differences have arisen, concur in the appointment or appointments;

11. Any party may serve the other parties or the arbitrators, as the case may be, with a written notice to concur in the appointment or appointments or in supplying the vacancy.

(2) If the appointment is not made within fifteen clear days after the service of the said notice, the Court may, on the application of the party who gave the notice and after giving the other parties an opportunity of being heard, appoint an arbitrator or arbitrators or umpire, as the case may be, who shall have like power to act in the reference and to make an award as if he or they had been appointed by consent of all parties.”

12. Section 8 empowers the Court to appoint an arbitrator or umpire in certain cases so that the arbitration agreement may not become abortive. It provides a machinery for effectively working out and enforcing the arbitration agreement. The scheme and object of S. 8 show that the application under this section can be made by persons by or against whom the arbitration agreement is mutually enforceable. Section 8(1)(a) comes into play when, after differences have arisen between the parties to the arbitration agreement, as regards the subject-matter of arbitration, all the parties do not concur in the appointment or appointments of one or more arbitrators to be appointed with the common consent of all the parties.

13. In the present case, the Arbitration Clause, reproduced in extenso earlier, in the contract (Ex. A), is of a peculiar nature. It provides that in the event of any dispute or difference of opinion between the Railway Administration, the petitioner, and, the contractor, the opposite party, as to the respective rights and obligations of the parties to the contract, it shall be referred to the sole arbitration of an officer who shall be nominated for the purpose by the General Manager, Northern Railway, for the time being, and his decision shall be Anal, conclusive and binding on the parties”. In the Arbitration Clause, in the matter of an appointment of the sole arbitrator by the General Manager of the petitioner, the words “by consent of the parties”, which occur in cl. (a), of sub-sec. (1) of S. 8, of the Act, are not to be found. As) a matter of fact, in the Arbitration Clause there is no mention whatsoever about “consent of the parties”.

14. Due to the absence of such an expression can it, therefore, be said, as contended on behalf of the petitioner, that S. 8(1)(a) would not apply here? In my opinion, to accept such a contention as valid would be to defeat the object of S. 8(1)(a), The reason why the words “by consent of parties”, envisaged by S. 8(1)(a) of the Act, are not to be found in the Arbitration Clause of the contract) (Ex. A), is that the consent of the opposite party was implied and his concurrence to the nomination of an arbitrator, whoever he may be, in terms of the arbitration agreement, by the General Manager was already given.

15. Only the General Manager of the petitioner had to nominate an officer of the Railway Administration as the sole arbitrator, and, on such a nomination by the General Manager, the arbitrator so nominated was to, and must, be, deemed to be the arbitrator appointed by consent of the opposite party also. By this Arbitration Clause, the opposite party, so to say, surrendered his consent and gave his consent in advance to the General Manager of the petitioner and left to his discretion and delegated his own consent and power to appoint an arbitrator to him, who was given the sole power to nominate the arbitrator and on his nomination of such an arbitrator, under the terms of the arbitration agreement, the arbitrator shall be deemed to have been appointed as an arbitrator “by consent of the parties”, as contemplated by and within the meaning of S. 8(1)(a) of the Act. It was, therefore, the duty of the General Manager to nominate an officer of the Railway Administration for the arbitration of the respective rights and obligations of the parties in respect of the disputed two wagons of sand.

16. In this connection, I would refer to a Bench decision of the Calcutta High Court in India Hosiery Works v. Bharat Woollen Mills Ltd., AIR 1953 Cal 488, where Chakravarti, C.J, with whom Sarkar, J., agreed, at p. 490 observed:

“Consent of the parties is the very essence of arbitration. Where the agreement provides for more than one arbitrator and they are not each to be appointed by all parties, it is necessary to provide expressly which of them will be appointed by whom, as in the, case of the agreements contemplated by Ss. 9 and 10. But where different arbitrators are not to be appointed by different parties and the intention is that all of them must concur in the appointment of the sole arbitrator or each of the arbitrators where there are more than one, it is not necessary to make any express provision in the agreement that the appointment or appointments are to be made ‘by consent of the parties’.”

17. In my opinion, the above observation of the learned Chief Justice, with which I express my respectful agreement, applies a fortiori to the present case also. Here, when one and the sole arbitrator was to be appointed only by the General Manager of the Northern Railway Administration, it was not at all necessary to make any express provision that the said appointment should be made by consent of the parties when the sole power of appointing arbitrator, by the arbitration agreement between the parties, was given to one party only, namely, the General Manager himself.

18. It should be borne in mind that the Arbitration Act does not purport of its own force to restrict the contractual rights of parties, but only gives effect to restrictions which they may choose to impose on themselves as regards the forum to which their disputes shall be taken. It is inherent in the arbitration agreement itself, in the instant case, that the nomination of the arbitrator by the General Manager shall be deemed to have been made by the consent of both the parties. There may be express provision to such an effect, but even in the absence of any express provision, such a provision must be taken to be necessarily implied.

19. For the reasons given above, I therefore, hold, that, in the instant case, S. 8(1)(a) of the Act applies, and, therefore, the application thereunder made by the opposite party was maintainable, and, the decision of the Court below on this question is correct.

20. It was, then, very seriously, contended by Mr. Bose that as the Arbitration Clause gave sole power to appoint the sole arbitrator to the General Manager of the petitioner, the Court below should have asked the General Manager to nominate an officer of his Administration, and, only on his failure to do so, the Court could proceed to make an Appointment. In my opinion, to accept this argument as correct in law would be to read something in section 8(1)(a) of the Act which is not to be found there.

21. What sub-sec. (1) of S. 8 of the Act postulates is that, after differences have arisen between the parties to an arbitration agreement, any party to it may serve the other party with a written notice to concur in the appointment of an arbitrator, and then sub-sec. (2) of S. 8 provides that if the appointment is not made within fifteen clear days after service of the said notice, the party who gave the notice can, then, apply to the Court; concerned, in any of the cases specified in the three clauses of sub-sec. (1) of S. 8 whichever may be applicable to the case for appointment of an arbitrator.

22. In the present case, the opposite party has followed the procedure envisaged by S. 8 of she Act. He gave a notice to the General Manager of the petitioner on 25-8-58 asking him to appoint an arbitrator in terms of the Arbitration agreement, as contemplated by it, but in spite of receiving the notice, as it is admitted that he received it, no such appointment was made, although the duty cast by the arbitration agreement between the parties was on him to make such an appointment.

23. The General Manager did not even send any reply, at all, to the notice served on him by the opposite party saying that he would do so presently or anything of the kind. The opposite party waited for fifteen days as required by S. 8(2), and, thereafter, long after the expiry of fifteen days, on 24-5-1959, made an application to the Court under S. 8(2) of the Act to appoint an arbitrator.

24. When such an application is made, there is no provision in the Act which requires the Court to give an opportunity to the defaulting party to make an appointment before making its own appointment. Section 8 nowhere says that the Court, in the first instance, shall ask the party in default; to nominate an arbitrator, and, then, and then only on his failure to do so, the Court will get jurisdiction to appoint an arbitrator itself under section 8(2) of the Act.

25. What S. 8(2) provides is that if the party who has to make an appointment does not do so, as here, in spite of the notice having been given, as contemplated by S. 8(2), the party giving the notice may then apply to the Court, after the expiry of fifteen days, within which the party served with the notice has to make the appointment, under S. 8(2) of the Act for appointment of an arbitrator, and, thereupon, the Court after giving an opportunity to the other party to be heard, shall appoint an arbitrator. The discretion, therefore, has been given to the Court to make its own appointment. There is no duty cast on the Court to consult the defaulting party and ask him first to make the appointment, before itself making the appointment.

26. In this connection, strong reliance was placed by Mr. Bose, on a Bench decision, of the Rajasthan High Court, in Chief Engineer, Buildings and Roads, Jaipur v. Harbans Singh, AIR 1955 Raj 30. That case, however, has no application here, because that was a case under S. 8(1)(b) of the Act and it was decided on the terms of the arbitration agreement in that case. In that case, the actual words used in the Arbitration Clause, were “Chief Engineer shall be the sole arbitrator and judge in case of dispute……”.

27. Wanchoo, C.J, (as he then was), who delivered the judgment of the Division Bench, at p. 81-32, observed:

“These words are different from the usual words of an arbitration agreement. Usually, the words used are to the effect that the parties will refer the dispute to arbitration, and thereafter, if somebody is to be appointed arbitrator, he is named. Further, we find that the Chief Engineer is not only to be the sole arbitrator, but also the sole judge. The use of the word ‘Judge’, to our mind, must carry some significance, and, we cannot agree with learned counsel for the opposite party that the word “judge” is a mere surplusage. It seems to us that the intention was not only that the Chief Engineer should be the only arbitrator but also the only judge of the dispute between the Executive Engineer and the contractor, if he was to be the only judge, the intention must be that no other person must judge between the contractor and the Executive Engineer on the points of dispute.”

28. It is plain from the above, that, in that case, as the intention of the parties was that the only arbitrator and also only the judge of the dispute between the parties was to be the Chief Engineer, and no other person, therefore, it was held that only the Chief Engineer could be appointed in such a case. In the present case, there is no such provision at all. The only relevant provision is that the General Manager shall appoint as the sole arbitrator any officer of the Northern Railway Department.

29. This does not mean that the General Manager has to be consulted before the Court appoints an arbitrator. If the argument put forward is accepted as correct, then in every case the Court will have to consult the person named in the Arbitration agreement to make the appointment of an arbitrator, but this would be an impossible position. Such a construction put on S. 8(2) will nullify its provisions and the object with which it has been enacted will be defeated.

30. The power of the Court to appoint an arbitrator under S. 8(2) is unfettered and not hedged by any such condition at all. It has absolute discretion in the matter of the appointment of an arbitrator, after hearing the other party. The words of sub-sec. (2) of S. 8 of the Act are “The Court may…….appoint”. This expression, of course, does not mean that the Court must appoint an arbitrator. The use of the word “may” implies that discretion is given to the Court. That discretion has, however to be exercised properly, and not arbitrarily. For these reasons, I would reject this contention of Mr. Bose.

31. Lastly, it was argued that, in any view of the matter, the appointment of a pleader in a case, where it is necessary to have a person having engineering knowledge to arbitrate between the parties, was not justified. In support of his contention, Mr. Bose relied on a Bench decision of the Punjab High Court in Union of India v. New India Constructors, Delhi, AIR 1955 Punj 172. This contention, on the facts of the present case, is well founded and must be given effect to.

32. The just mentioned case was under section 8(1)(b) of the Act. In that case also, an advocate was appointed but his appointment was set aside by the High Court and the appointment of a qualified engineer was approved.

33. There is no doubt that a qualified engineer would surely be better than a mere pleader in settling the disputes here, involving technical matters. In this view, I would hold that although the Court below had jurisdiction to decide the application under S. 8 of the Act, it had made an improper use of its discretion in appointing a pleader as the arbitrator. In the result, the application succeeds in part, the rule is partly made absolute, the order of the Court below, appointing Sri Ram Bahadur Sinha, pleader, as the sole arbitrator, only is set aside, and, it is directed to appoint a qualified Engineer after hearing the parties. There will be no order for costs of this Court.

BE/M.K.S

34. Order accordingly.